You don’t have to reinvent the wheel to create new leads and promote your brand’s visibility. All you have to do is capitalize on the loyalty of your previous customers.

According to a new study from Altimeter, online customer testimonials and social recommendations are the key to changing the conversation from social media interaction to transaction. The research found that capitalizing on customer reviews, “added immediate profits and reduced sales costs by as much as 33 percent.”

It should come as no surprise to retailers that their customers are using social media to share their opinions about their products. Good word of mouth is a huge driving force when a customer is deciding to purchase one product over the other. Companies in the know look to their past customers, and use their reviews to manage their brand identity and turn browsers into buyers.

In the below presentation from this past January’s Social Commerce Strategies event, Kirit Sarvaiya, Content and Community Executive at Guitar Center, used a case study of the company’s own success to demonstrate the power of customer reviews and user generated content (UGC) to increase sales and deepen engagement with customers. Kirit also spoke at last week’s eTail West 2013 conference in Palm Springs, about 10 quick tips for website innovation.

A couple of key take-aways from the study:

• Sarvaiya shows that you can harness the potential of reviews to edit your inventory to showcase a better product and build trust.
• Engagement with consumers can be enhanced by using user-generated content like testimonials.
• By using Powershare, Sarvaiya was able to increase user-experience, increase traffic and ultimately increase conversion and bottom line revenue overall.

Download the full transcript here to some awesome insight into this million dollar question that everyone wants the answer to.